In July, the OIG issued a report entitled, “Vulnerabilities in the Medicare Hospice Program Affect Quality Care and Program Integrity.”  Fifteen recommendations were made by the OIG to CMS, including to “Assess the current payment system to determine what changes may be needed to tie payments to beneficiaries’ care needs and quality of care to ensure that services rendered adequately serve beneficiaries’ needs.”  Partnerships between oncology, primary care and hospice – forged around palliative care under a shared savings model – are precisely the changes needed. These partnerships would align economics for the best interest of the most important party: The patient.

The problem expressed with the current system is that hospice companies are compensated per day, regardless of the treatment provided.  This creates an economic disincentive to provide comprehensive care.  Moving to a fee-for-service model risks over-treatment, and the cost of hospice to CMS has already increased from $9.2 billion in 2006 to $16.7 billion in 2016, with an expectation that this number will rise as the number of beneficiaries in hospice rises.  A shared savings model can not only improve the hospice industry, but also encourage it to form alliances with primary care and oncology.

By creating a “palliative care” partnership – beginning with a terminal diagnosis and running until the end of an individual’s life – considerable savings can be achieved, and providers who are able to coordinate care for such individuals could expect an increase in revenue.  The patients though, would be the biggest beneficiaries of such a care redesign.

Each partner along the continuum of care would realize a benefit to align:


Hospice companies are well positioned to expand their care to encompass all palliative care.  This expansion requires a thorough review of policies and procedures, particularly related to bioethics and informed consent.  A patient-centered approach is necessary to both capture and fulfill each patient’s wishes and values and how those translate into a clinical care plan.  It also requires a greater focus on care coordination.  Palliative care is an ideal complement – not competitor – to oncology and primary care, and shared-savings programs allow these partnerships to flourish.


Oncology and palliative care have historically been set up as an “either or” proposition for patients.  By aligning these healthcare silos around shared-savings, patients receive the best of both worlds: Treatment and comfort.

Even for untreatable cancers, oncologists play an essential role in helping patients understand and manage their conditions. These caregivers should not be eliminated once a palliative course is chosen.

To be sure, many cancer programs now embed palliative resources into their clinics and centers.  But the fee-for-service system offers no meaningful, economically viable, path for comprehensive care coordination between the two essential fields.  Shared-savings programs create this path.

Shared savings programs help eliminate the wide variability in this area and warrant groups having fully-staffed palliative care tracts and partnerships with hospice. They also increase patients’ education in, and access to, such programs.

Primary Care:

Too often, patients with a terminal illness are admitted to a hospital for treatment that would otherwise be considered “primary care.” For each day a patient spends in a hospital, the bill could typically be around $12,000.  Proper care coordination could eliminate a majority of these hospital stays and thereby improve overall quality of life.

Well-integrated and coordinated primary care teams would be ideal for patients on their end-of-life journeys.  Patients should not have to spend any unnecessary time in a hospital because primary care doctors are not brought in as part of a palliative care team.  Patients would be more comfortable having a dedicated team, and expensive hospital costs could be redistributed to the very providers who can help prevent hospitalizations.

End of Life Care:

When “end of life” care begins is the subject of debate, and many measure the cost from a specific diagnosis.  Regardless, aggressive, unnecessary treatment too often occurs in the last few days or perhaps weeks of a person’s life.  “Futile care” costs the system billions of dollars each year and, by definition, is counter to the best interest of the patient.  Fulfilling the wishes of every patient is consistent with eliminating futile care – if managed properly.

A thorough informed consent process with advanced directives – coupled with family and care coordinator intervention – can eliminate a large percentage of futile care.  To avoid any potential conflicts of interest, decisions regarding end of life care should be made in consultation with a bioethics committee that has no financial ties to any medical treatment, or lack thereof.  This process is critical and very feasible.

The fee-for-service system incents costly end-of-life care without regard to quality of life or futility.  It also undervalues palliative care coordination.  A shared-savings model provides a business incentive that can ensure that all patients have their end-of-life wishes understood and carried out.

Palliative Care Redesigned:

Building palliative care partnerships requires strong leadership, as several parties need to coordinate care and share information – ideally through a single platform. The technology exists, and the cost is relatively low considering the potential shared-savings at stake.

Those willing to take the steps necessary to build these partnerships could realize significant benefits.  So too could their patients.

Brian S. Kern, JD, CEO of Deep Risk Management – a boutique financial risk firm that specializes in helping physicians and healthcare entities engaged in at-risk value-based care models.